The Union Cabinet’s approval of a relief package for Vodafone Idea (Vi) could pave the way for the government’s potential exit from the financially stressed telecom operator, with a stake sale currently under consideration, according to top government sources cited by The Indian Express in a report by Soumyarendra Barik and Anil Sasi dated January 2, 2026.
Stake sale under review
The government, which holds a 49 per cent stake in Vodafone Idea after converting interest dues into equity in February 2023, is also exploring the possibility of bringing in a private sector investor. Two large corporate groups had expressed interest at different points, the sources reportedly said, adding that no final decision has been taken on the mode or timing of the stake sale. Any exit, however, would be contingent on the government selling its equity at a profit.
"Two big corporate groups had evinced interest at different points in time. An internal yardstick for the government to exit would be that it would have to sell its stake at a profit. But no decision has been taken on the path to be taken for sale of government equity," the sources were quoted as saying.
Once the stake sale is executed, a new investor could eventually acquire majority control of the company. The government’s broader concern, officials have said earlier, is to avoid excessive concentration in India’s telecom sector and ensure the presence of multiple viable players in what it considers a critical industry.
According to the report, a senior official had earlier said the government was concerned about the highly concentrated nature of India’s telecom sector and it would ostensibly like to have multiple players in this “critical sector,” for which Vodafone Idea needs to be “a viable player”. But its precarious financial situation has raised concerns about its survival in the competitive telecom marketplace.
Vi AGR dues frozen
The Cabinet’s relief package includes freezing Vodafone Idea’s adjusted gross revenue (AGR) dues of Rs 87,695 crore and allowing repayment of statutory dues over a 10-year period from FY32 to FY41. AGR dues for FY18 and FY19 will be paid between FY26 and FY31, without any change. Annual AGR payments of around Rs 18,000 crore were earlier set to begin in March 2026.
The relief follows a Supreme Court order earlier this year permitting the government to reassess the company’s statutory dues. AGR liabilities frozen as on December 31 will now be reviewed by the Department of Telecommunications, with the final decision to be taken by a government-appointed committee and binding on both parties.
Vodafone Idea had told the Supreme Court that without relief, its financial stability would be severely impacted, potentially jeopardising the government’s stake. Including penalties and interest, the company’s total liabilities to the government are estimated at nearly Rs 2 lakh crore.
Burdened by high debt, declining revenues and a shrinking subscriber base, the operator has struggled to raise funds from the market. As of December 2024, Vodafone Idea’s total debt stood at around Rs 2.3 lakh crore, including Rs 77,000 crore in AGR liabilities and Rs 1.4 lakh crore in spectrum dues.
The latest Cabinet decision marks the second major lifeline extended to the company. Under the 2021 telecom relief package, the government had approved the conversion of Rs 6,133 crore of Vodafone Idea’s interest dues into equity in February 2023.
Vodafone Idea Loses Over 1 Million Subscribers
Most recently according to TRAI's Telecom Subscription Data as of November 30, 2025, released on December 31, 2025, Vodafone Idea lost 1,011,134 (1.01 million) wireless subscribers during the month.
No official communication yet: Vodafone Idea
Meanwhile, Vodafone Idea issued a clarification to the stock exchanges on December 31, 2025, in response to a rumour verification sought following a news report published in the mainstream media.
In its response, the company said:
"This is with reference to your e-mail dated 31 December 2025 seeking clarification on the news article appeared in mainstream media titled “Vodafone Idea AGR dues of Rs. 87,695 crore frozen by Cabinet; Stock gives up gains” and the consequent material price movement in the Scrip of the Company today i.e. on 31 December 2025.
Clarifying the matter, Vodafone Idea added:
“We have not received any communication from the Government in relation to the above reported matter. As and when there is any development which requires disclosure, we will do the needful”
